Comerica Inc. swung to a loss in the fourth quarter, though it wasn't as wide as expected, while the large regional bank's credit-loss provision rose, as did charge-offs and nonperforming loans.
However, the loss provision and charge-offs improved sequentially. The money set aside for losses jumped a third from a year earlier to $257 million but was down 17% from the third quarter.
Net charge-offs, those the company doesn't expect to collect, were 2.1%, up from 1.04% a year earlier but down from 2.14% the previous quarter. Nonperforming loans, those in danger of default, were 3.06%, up from 1.94% last year and rising from 2.99% last quarter.
Chairman and Chief Executive Ralph W. Babb Jr. said deposits continued to post strong growth and a slower pace of decline in loan demand was seen. "These positive developments lead us to believe our core fundamentals will continue to show improvement in 2010," he said.
The real-estate crisis has been particularly hard on Comerica, as bigger-than-expected write-downs on soured loans combined with timid loan demand. Comerica has particular exposure to commercial real estate and construction loans, and with banking units in Michigan, Arizona, Florida and California, it operates in areas worst hit by the housing bubble.
The company posted a loss of $29 million, or 41 cents a share, compared with a year-earlier profit of $19 million, or 2 cents a share. Analysts surveyed by Thomson Reuters predicted a 49-cent loss.
Interest income fell by 8.1% to $396 million, while noninterest income rose 23% to $214 million.
The bank received $2.25 billion from the government's Troubled Asset Relief Program, which analysts think will be paid back soon.
Comerica's shares closed Wednesday at $33.57 and weren't active premarket. The stock rose by half in 2009 and has risen by more than 10% since the start of the year.